2 top growth stocks I'd buy in May

Recruitment giant Hays(LSE: HAS) is still struggling to recover from the share market sell-off that kicked off during the last knockings of January.

The business is currently trading at a 12% discount to levels seen almost three months ago. And this comes despite the release of encouraging trading numbers since then that reinforced Hays' long-term earnings prospects.

So those seeking a brilliant bargain should seriously consider breaking out their chequebook and loading up on the FTSE 250 firm, in my opinion.

Big news abroad

Last time I covered the stock back in February I celebrated the brilliant progress Hays was making in foreign markets. And the company was back at it again earlier this month, news I think has been unjustifiably ignored by the market.

It advised in April that like-for-like net fees jumped an impressive 10% in January-March, helped by further excellent rises in its overseas territories. In Germany net fees on this basis rose 16%; in Australia and New Zealand they jumped 12%; while elsewhere (bar its home market) a 15% like-for-like improvement was clocked.

Now look, not all is well in the garden, and Hays' continued woes in its home territories of the UK and Ireland -- where like-for-like sales drooped 2% in the last quarter -- continue to negatively colour investor appetite.

Strong earnings and dividend growth

But I reckon the market needs to overlook these troubles, given the brilliant progress Hays is making in other global markets. Indeed, of the 33 countries it operates in, the business saw net fees rise by double-digit percentages in 20 of them.

And with it bulking up its workforce in these regions, with its international headcount rising 15% year-on-year in Q3, City analysts are expecting earnings to continue ripping higher.

Advances of 15% and 10% are forecast for the years to June 2018 and 2019 respectively, resulting in an undemanding forward P/E ratio of 16.2 times and a bargain-tastic corresponding PEG readout of 1.1.

And this bright outlook leads to predictions of excellent dividend growth too. Fiscal 2017's 7.47p per share total reward is anticipated to rise to 7.8p this year and to 9.8p next year, figures that create monster yields of 4.3% and 5.5% respectively.

Another global giant

Homeserve (LSE: HSV) is another brilliant FTSE 250 share that those seeking brilliant profits and dividend expansion need to check out.

In the years to March 2019 and 2020 the emergency callout specialist is expected to report earnings improvements of 10% and 11%. And these give rise to predicted dividends of 19.5p per share for this year, up from an anticipated 17.8p when results are eventually released for fiscal 2018. And this forecast rises to 21.6p for next year. Consequently Homeserve sports meaty yields of 2.7% and 2.9% for this year and next.

In less attractive news the business changes hands on a slightly-heavy forward P/E ratio of 20.6 times. However, this should not necessarily discourage investors from piling in today -- the number of customers on Homeserve's books swelled to 8.4m in the last fiscal year from 7.8m previously, and thanks to its sterling progress in North America I reckon group business should keep on shooting skywards.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Homeserve. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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